Intangible Assets Held by Not-For-Profit Organizations

ASNPO 4432

Intangible Assets Held by Not-For-Profit Organizations

ASNPO 4432

Scope
  • This section deals with accounting for intangible assets acquired or developed by a not-for-profit organization
  • If an issue is not covered in this section use ASPE Section 3064 – Goodwill and intangible assets
Small NPO’s
  • when the average of annual revenues for the current and preceding period of the organization and any entities it controls is less than $500,000, it does not need to follow this section
    • therefore, it does not need to capitalize intangible costs; or if it chooses to capitalize limited life intangible assets, it does not need to amortize it
  • organizations that meet this criterion and who do not follow this section must disclose:
    1. the policy followed in accounting for tangible capital assets
    2. information about tangible capital assets not capitalized, including a description of the assets; and
    3. if tangible capital assets are expensed when acquired, the amount expensed in the current period
  • once the NPO’s average annual revenues reach 500K or above, it must always follow this section (capitalize intangible assets), even if the revenues subsequently dip below 500K
Recognition and measurement
  • When an intangible asset no longer contributes to the organization’s ability to provide services, its carrying amount is written down to residual value
  • A write-down should not be reversed
  • For other issues like initial recognition and subsequent measurement (i.e. amortization) use ASPE section 3064, since it is not covered under ASNPO

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